Teco Aims to Be Among Top-3 Compressor Suppliers in China

Taipei, Aug. 21, 2008 (CENS)--After completing construction of its new plant in Qingdao, China, Teco Electric & Machinery Co., Ltd., a leading Taiwanese supplier of compressors, aims to achieve annual capacity of 3.8 million compressors at the plant, ranking among the top 3 suppliers of compressors in the Chinese market in the next five years, according to Theodore Huang, chairman of the company.

In 2006, Teco and China Steel Corp., Taiwan's largest steel maker, decided to jointly invest a total of NT$1.75 billion to establish the new plant, which will see three production lines dedicated to production of household-use compressors.

Teco has seen its business operations grow rapidly over the past two years, and its net profits reached NT$559 million in the first quarter of this year. Despite having to write off investment losses of NT$600 million in the second quarter, the company is still seen able to challenge net profits of NT$1.2 billion for the first half of the year, and a five-year high of NT$3 billion, or NT$1.58 per share, in the net annual earnings for this year.

Huang said that a global economic recession has inevitably caused a growth slowdown in China's economy recently; however, stronger consumer demand in the county will still bring huge sales potential than that in markets of Europe and America in the future. Hence, this has driven Teco to keep deploying its business in the country so far.

In addition to the aforementioned new plant, Teco has also set up a joint venture in China with Korean's largest commercial compressor maker Finetec Century. The two parties invested US$8 million each in the joint venture, which will focus on producing high-end compressors to be sold under both brands of Teco and Century for commercial air conditioners, according to Huang.

He added that the move to work with Finetec Century will hopefully help his company to penetrate the local market for commercial compressors in the future, with the market long dominated by large-sized foreign companies, like U.S.'s Carrier Co., for a long time. The joint venture is expected to attain annual revenue of US$90 million within the next five years.